[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62802-62804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24684]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70696; File No. SR-NYSEMKT-2013-82]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change for a Temporary 
Suspension of Those Aspects of Rules 36.20--Equities and 36.21--
Equities That Would Not Permit Floor Brokers To Use Personal Portable 
Phone Devices on the Trading Floor Due to the Unavailability of 
Exchange-Provided Cell Phones Beginning on October 10, 2013 Until the 
Earlier of When Cell Phone Service Is Restored or October 11, 2013

October 16, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on October 10, 2013, NYSE MKT LLC (the ``Exchange'' or 
``NYSE MKT'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes a temporary suspension of those aspects of 
Rules 36.20--Equities and 36.21--Equities that would not permit Floor 
brokers to use personal portable phone devices on the Trading Floor due 
to the unavailability of Exchange-provided cell phones beginning on 
October 10, 2013 until the earlier of when cell phone service is 
restored or October 11, 2013. The text of the proposed rule change is 
available on the Exchange's Web site at www.nyse.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to temporarily suspend those aspects of Rules 
36.20--Equities and 36.21--Equities that would not permit Floor brokers 
to use personal portable phone devices on the Trading Floor.\4\ As 
proposed, all other aspects of Rule 36--Equities remain applicable and 
the temporary suspensions of the applicable Rule 36--Equities 
requirements are in effect beginning October 10, 2013 when the outage 
began, and remain in place until the earlier of when phone service is 
restored or close of business Friday, October 11, 2013.\5\
---------------------------------------------------------------------------

    \4\ Pursuant to Rule 6A--Equities, the Trading Floor is defined 
as the restricted-access physical areas designated by the Exchange 
for the trading of securities.
    \5\ The Exchange provided Floor brokers with notice of this rule 
filing, including the applicable recordkeeping and other 
requirements related to using personal cell phones during the 
temporary suspension of Rule 36--Equities.
---------------------------------------------------------------------------

    On October 10, 2013, the third-party carrier that provides service 
for the Exchange-provided cell phones experienced an issue that 
affected Exchange authorized and provided portable phones for Floor 
brokers. This outage only impacted the service for Exchange authorized 
and provided portable phones. As a result, all Exchange authorized and 
provided cell phones were non-operational before the opening of trading 
on October 10, 2013. The Exchange is working closely with the third-
party carrier to restore such cell phone service.
    Rules 36.20--Equities and 36.21--Equities govern the type of 
telephone communications that are approved for Floor brokers. Pursuant 
to Rule 36.20--Equities, Floor brokers may maintain a telephone line on 
the Trading Floor and use Exchange authorized and provided portable 
phones while on the Trading Floor. The use of such Exchange authorized 
and provided portable phones is governed by Rule 36.21--Equities. 
Because of the issues with the third-party carrier, all Exchange 
authorized and provided portable phones are not functional and 
therefore Floor brokers cannot use the Exchange authorized and provided 
portable phones. However, the personal cell phones of Floor brokers are 
operational on the Trading Floor. The Exchange believes that because 
communications with customers is a vital part of a Floor broker's role 
as agent and therefore contributes to maintaining a fair and orderly 
market, during the period when Exchange-provided cell phones are non-
operational, Floor brokers should be permitted to use personal portable 
phone devices in lieu of the non-operational Exchange authorized and 
provided portable phones.
    The Exchange therefore proposes to temporarily suspend the 
limitations in Rules 36.20--Equities and 36.21--Equities that permit 
Floor brokers to use only Exchange authorized and provided portable 
phones so that Floor brokers may also use personal portable phones on 
the Trading Floor. The Exchange proposes that pursuant to this 
temporary suspension, Floor brokers must provide the Exchange with the 
names of all Floor-based personnel who used personal portable phones 
during this temporary suspension period, together with the phone number 
and applicable carrier for each number.

[[Page 62803]]

Floor broker member organizations must maintain in their books and 
records all cell phone records that show both incoming and outgoing 
calls that were made during the period that a personal portable phone 
was used on the Trading Floor. To the extent the records are 
unavailable from the third-party carrier, the Floor brokers must 
maintain contemporaneous records of all calls made or received on a 
personal portable phone while on the Trading Floor. As with all member 
organization records, such cell phone records must be provided to 
Exchange regulatory staff, including without limitation staff of the 
Financial Industry Regulatory Authority (``FINRA''), on request.
 2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\7\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, because of issues experienced by a third-party cell 
phone carrier, Exchange authorized and provided cell phones are not 
functional. The Exchange believes that the proposed temporary 
suspensions from those aspects of Rule 36--Equities that restrict Floor 
broker's use of personal portable phones on the Trading Floor removes 
impediments to and perfects the mechanism of a free and open market and 
national market system because the proposed relief will enable Floor 
brokers to conduct their regular business, notwithstanding the ongoing 
issues with telephone service. The Exchange further believes that 
without the requested relief, Floor brokers would be compromised in 
their ability to conduct their regular course of business on the 
Trading Floor. In particular, for Floor brokers, because they operate 
as agents for customers, their inability to communicate with customers 
could compromise their ability to represent public orders on the 
Trading Floor.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe that the proposed rule change will impose any burden on 
competition because the proposed change only impacts Floor brokers and 
has no change in operations for other market participants or other 
market centers. To the contrary, the Exchange believes that without the 
proposed relief, Floor brokers would be compromised in their ability to 
conduct their regular course of business on the Trading Floor, thereby 
placing a burden on the Floor brokers' ability to compete.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Waiver of the 
operative delay allows the terms of the relief described herein to be 
available during the service outage for Exchange-provided cell phones. 
Therefore, the Commission hereby waives the 30-day operative delay and 
designates the proposal operative upon filing.\14\
---------------------------------------------------------------------------

    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) of the Act \15\ to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEMKT-2013-82 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSEMKT-2013-82. 
This file number should be included on the subject line if email is 
used. To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will

[[Page 62804]]

post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent 
amendments, all written statements with respect to the proposed rule 
change that are filed with the Commission, and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for Web site viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE., Washington, DC 20549, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEMKT-2013-82 and should be submitted on or before 
November 12, 2013.
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24684 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P